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San Antonio City Council removes preference points from SBEDA program

The San Antonio City Council has voted 7 to 4 to amend the City's Small Business Economic Development Advocacy (SBEDA) program to remove provisions giving "preference points" to minority- and women-owned businesses (MWBEs) in City contracting. The changes are due to take effect on August 1st, 2025.

The contracts that will be affected by the deletion of the preference points provisions are the City's "discretionary" contracts, which make up about a quarter of its spending, and which allow for the City to award points based on various criteria to bids, rather than simply taking the lowest bidder. After August 1st, 2025, all small businesses will be awarded 20 points (out of a possible 100 points on the scale), regardless of ownership.

One race- and gender-conscious tool will remain after the amendments to the SBEDA program, however, that being MWBE aspirational participation goals. The city will still be allowed to set such goals and require prime contractors to make good-faith efforts to meet the goals by subcontracting with MWBEs. Additionally, council members supporting the change noted that the 2023 disparity study conducted by the City found data which, when analyzed, shows that 97 percent of contracts awarded to MWBEs during the preceding seven years would still have been awarded to them without the preference point program.

Other tools adopted by the City in the new ordinances approved by City Council include a new "emerging business" certification for micro-sized small businesses, and implementing a personal net worth cap of  $2.047 million on its existing small business certification (in line with the U.S. Department of Transportation's size standards).

Read the City Council Agenda Memorandum relating to the SBEDA changes, as hosted by the San Antonio Report, at https://sanantonioreport.org/wp-content/uploads/2024/12/san-antonio-sbeda-policy.pdf.

Read the 2023 disparity study conducted by the City at https://www.sanantonio.gov/SBO/Compliance/Disparity.